GE General Electric Weekly and Daily Charts; Oversold; Falling Wedges; Positive Divergence

The trading floors are scattered with the bodies of dip-buyers believing that the industrial giant General Electric would recover. The knife-catchers keep buying GE but they run screaming from the ticker with bloody hands giving up and swearing to never buy General Electric ever again.

Now that the landscape is riddled with the GE dip-buyer's lifeless bodies, that have now all given up on the stock, it is of course time for the industrial turd to float higher. Both the daily and weekly charts indicate universal positive divergence across all indicators on both charts. Price is washed out to the downside. The indicators show that strength has been developing for the last month despite the further drop in price. The possie d should launch price higher in the days and 1 to 3 weeks ahead.

Price is also extended way below the moving averages requiring a mean reversion higher. It is tricky, however, to play stocks in the opposite direction of a strong trend. On the bull side, to have possie d across all indicators on both the daily and weekly charts, and falling wedges, and oversold conditions, that is a recipe for an upside launch.

The fly in the ointment is the monthly chart that still wants to explore lows on a monthly basis going forward. Thus, if you play the bounce now do not hold GE for the long run. Simply take the profits as it bounces probably during the month of February. GE will then likely roll over again due to the monthly chart but an upward bias may continue through February and March. GE would be expected to roll back over to the downside again and perhaps place a more substantive low at 12-15 in the spring and summer. That will likely at least stabilize the stock and set up a sideways range through 12-17 through the end of the year.

For now, in the short term, a bounce should occur to the 16-17 area this month. Keystone does not hold a position in GE currently but will buy some this week on the long side holding out his hands, with the palms facing up, to see if he can step in and successfully catch the GE falling knife. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.